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Evidence Acquisition and Voluntary Disclosure
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R&R at the Journal of Economic Theory
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Which hard evidence to seek if disclosure is voluntary?
PDF ACM EC '21 Extended abstract Jun 2024
A sender seeks hard evidence to persuade a receiver to accept a project by designing a quality test. Testing is not perfectly reliable and produces evidence only with some probability. If the sender obtains the evidence, she can choose to disclose it or pretend to not have obtained it. We show that when reliability is low, the sender chooses a pass/fail test that reveals whether the quality is above or below a threshold. Moreover, the equilibrium pass/fail threshold is always monotone in reliability but whether it is increasing or decreasing depends on whether evidence acquisition is overt or covert.